T-Mobile, RCA join forces to stop Verizon's cable deals

T-Mobile USA, the Rural Cellular Association and public interest group Public Knowledge are joining together to formally oppose Verizon Wireless' (NYSE:VZ) planned $3.9 billion purchase of AWS spectrum from cable companies.

The three will forge a new group, dubbed the Alliance for Broadband Competition, which describes itself as a "collection of like-minded businesses, trade associations, and public interest groups who are concerned about the ability for the current marketplace to sustain a competitive broadband landscape." Representatives from the American Antitrust Institute and Free Press are scheduled to make an appearance during the group's introductory conference call with media.

Sprint Nextel (NYSE:S), which has urged the FCC to examine the Verizon deal closely but has not formally asked the FCC to block the transaction, supports the new coalition but is not participating in the call.

T-Mobile, the RCA and Public Knowledge have made no secret of their opposition to the deal, with RCA accusing Verizon of warehousing it spectrum and T-Mobile arguing that it uses spectrum 50 percent more efficiently than Verizon in top markets. Verizon has rebutted these claims repeatedly in its FCC filings, and has said it needs the spectrum to keep pace with growing data demands. Moreover, Verizon has argued that it will put to good use spectrum that the cable companies are not using and that it will sell its Lower 700 MHz A and B Block spectrum if it receives regulatory approval for the cable deals.

"This faux-coalition is 'old whine in a new bottle.' The same companies and political groups, making the same claims, that have already been filed at the FCC on the SpectrumCo deal," Verizon said in a statement. "In short, there is nothing new here. Verizon Wireless has responded to each of these claims in our filings on multiple occasions, has addressed them with the FCC, and is confident that we have a made a strong case on bringing unused spectrum to meet the needs of consumers is in the public interest."

T-Mobile, meanwhile, has a clear interest in ensuring that as much AWS spectrum remains on the market as possible. The company is using AWS spectrum to deploy LTE, and despite the spectrum it received from AT&T (NYSE:T) as a result of AT&T's failed $39 billion acquisition of T-Mobile, T-Mobile has said it will need more spectrum.

In December Verizon agreed to pay $3.6 billion for the nationwide AWS spectrum licenses held by SpectrumCo, a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks. Separately, Verizon said it will buy Cox Communication's 20 MHz of AWS spectrum covering 28 million POPs for $315 million. All of the deals include the option of Verizon reselling cable services and cable companies reselling Verizon service. The cable companies can also become MVNOs of Verizon.

Sprint, T-Mobile and the public interest groups have argued that Verizon and the cable companies have been too secretive about the details of the commercial arrangements they have struck. Verizon and the cable companies have said the deals are outside of the FCC's purview.